BBL - finally 6 years are up! Spongebob plan has worked

[zeus70]

So finally teh 6 year terms are coming to an end! If you followed the spongebob plan and submitted your ds01 forms, you bank can now claim off the government guarantee. Expect lots of loans to be written off in the coming month.
Once that happends, companies house should allow the dissolution to go through.

Good luck everyone.

 

[JEREMY HAWKE]

So finally teh 6 year terms are coming to an end! If you followed the spongebob plan and submitted your ds01 forms, you bank can now claim off the government guarantee. Expect lots of loans to be written off in the coming month.
Once that happends, companies house should allow the dissolution to go through.

Good luck everyone.

Its not that simple they are investigating alsorts of sculdugerry and its going to take a decade
If you scuppered your company straight after getting the loan then you had better have your ducks in order if you didn't use an IP
The advise for companies with covid funding was clear from this forum when the loans were dished out .
Dissolve the company properly The Sponge Bob plan is not suitable for this

 

[DWS]

As above it’s not that simple, yes the banks can claim the Government guarantee but all this now does is shift the burden to the tax payer.
The tax payer still owes the Government and remains liable for the debt.
Whether this debt is chased or not is another story!

 

[UK Contractor Accountant]

So finally teh 6 year terms are coming to an end! If you followed the spongebob plan and submitted your ds01 forms, you bank can now claim off the government guarantee

Source please for the Government unblocking mechanism for Strike Offs to happen for companies with BBL's outstanding

 

[zeus70]

i know quite a few people in Banking and they sare saying the same thing

1. banks can now claim off the gov guarantee aa loan term has ended.
2. in 12 moths times majority of these loans will be statute barred due to 6 year rule
3. GOV already having behind the scened talk about removeing zombie companies from registrar

Majority of these limted will be allowed to close down, the ones highlighted for fraud will still be investigate. This is the final stretch.

 

[gpietersz]

2. in 12 moths times majority of these loans will be statute barred due to 6 year rule

Is the six year rule not more complicated than that? its six years from when the last payment was made or acknowledged or similar? So this is only going to be true for people who stopped paying immediately - which will have a significant overlap with those being investigated for fraud, I imagine.

 

[zeus70]

Most will be allowed to be dissolved before becoming statute barred that's what I'm hearing. Either way, this is now the endgame.

 

[Lisa Thomas]

i know quite a few people in Banking and they sare saying the same thing

1. banks can now claim off the gov guarantee aa loan term has ended.
2. in 12 moths times majority of these loans will be statute barred due to 6 year rule
3. GOV already having behind the scened talk about removeing zombie companies from registrar

Majority of these limted will be allowed to close down, the ones highlighted for fraud will still be investigate. This is the final stretch.

No. 2 is curious because my understanding of the recovery policy is that the Bank's had to continue making demands to the debtor for the monies and that the 6 year rule won't start until that stops.

 

[Mark T Jones]

No. 2 is curious because my understanding of the recovery policy is that the Bank's had to continue making demands to the debtor for the monies and that the 6 year rule won't start until that stops.

You are correct - and our Government have sheds full of people to take over collections

I suspect there will be a review as to which cases are worth pursuing, but no real withdrawal from collecting our money.

 

[zeus70]

truth is banks have not been chasing most people, as they have been waiting for the loan term to end so they can just claim off the guarantee. Its all planned.

 

[Newchodge]

Most will be allowed to be dissolved before becoming statute barred that's what I'm hearing. Either way, this is now the endgame.

Where have you heard all of this?

 

[Mark T Jones]

Where have you heard all of this?

Daaahn the pub...

 

[UK Contractor Accountant]

I don't know why they haven't let these zombie companies be dissolved in the first place other than to keep the BBL debts of the Governments books.

Even if dissolved fraud can still be investigated by the Insolvency Service thanks to the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021

 

[JEREMY HAWKE]

Where have you heard all of this?

I think he is trying to convince himself to get a better sleep at night
Raising the issue in the first place indicates some level of worry and doubt

 

[zeus70]

This is what the british banks flagged at the beginning on 2026, knowing the 6 year deadline was approaching:

Suspected fraud flagged
£1.88bn

Gov. guarantees paid to lenders
£11bn

This suggest (and hence my post) that they have already decided to claim on majority of the loans, as they have not been flagged as fraud. Anyone that hasnt been chased for the last 6 years, probably just needs to wait now, as i said this is the endgame as the 6 year rulem ends in 12 motnhs, after which they cannot legally enforce it anyway.

 

[Mark T Jones]

This suggest (and hence my post) that they have already decided to claim on majority of the loans, as they have not been flagged as fraud. Anyone that hasnt been chased for the last 6 years, probably just needs to wait now, as i said this is the endgame as the 6 year rulem ends in 12 motnhs, after which they cannot legally enforce it anyway.

Completely incorrect....

 

[gpietersz]

@zeus70 I cannot substantiate your numbers. can you cite a source?

The six year rule will only apply to people who made no repayments?

That would mean businesses stopped trading before the first repayment was due. They would have had to made a statement saying the business was continuing to trade, so for this to be an honest mistake the business would have had to at least intended to continue trading at the time loan was made and things to have got so much worse before the first repayment was made that it could not make repayments.

This has got to be a rare case.

Probably a lot of outright fraudsters in this situation, but the six year rule does not apply to fraud.

 

[JEREMY HAWKE]

@zeus70 I cannot substantiate your numbers. can you cite a source?

The six year rule will only apply to people who made no repayments?

That would mean businesses stopped trading before the first repayment was due. They would have had to made a statement saying the business was continuing to trade, so for this to be an honest mistake the business would have had to at least intended to continue trading at the time loan was made and things to have got so much worse before the first repayment was made that it could not make repayments.

This has got to be a rare case.

Probably a lot of outright fraudsters in this situation, but the six year rule does not apply to fraud.

That's right and if your doing it at this point in time 6 years ago you would have already known that your business was in trouble before you applied for the loan

The bank or the government officials will say that you were trading insolvency

 

[UK Contractor Accountant]

As of early 2026, the 6-year term for many Bounce Back Loans (BBL) taken out in May 2020 has expired. There is no "unblocking system" at Companies House that automatically clears restrictions just because 6 years have passed. Instead, the government has introduced a voluntary repayment window operating until 31 December 2025 to manage an enforcement backlog.

Key Developments After 6 Years (2026)

• No Automatic Amnesty: The 6-year mark does not erase debt or liability. If the loan is not repaid, the company may be investigated, even if it has already been dissolved.
• Voluntary Repayment Scheme (Deadline 31 Dec 2025): The government has set this deadline for directors to repay misused funds, partial payments, or full payments. While not a "true amnesty," coming forward early can act as a mitigating factor in investigations, potentially reducing disqualification periods.
• Enhanced Enforcement Powers: Under the Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021, the Insolvency Service can investigate directors of dissolved companies, with many director disqualifications (up to 15 years) still being processed in 2026 for pandemic-era misuse.
• Objections to Dissolution: Companies House continues to block the dissolution (strike-off) of companies with active BBL debt. Attempts to strike off are viewed as a red flag for fraud.

 

[gpietersz]

The bank or the government officials will say that you were trading insolvency

Also very likely making a false declaration that you intended to continue trading.

voluntary repayment window operating until 31 December 2025

So that has passed.

Companies House continues to block the dissolution (strike-off) of companies with active BBL debt

Would that not be the creditors rather than CH objecting to strike off?

 

[gpietersz]

Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021

It looks to me that the act makes the Spongebob plan riskier in general, not just for businesses with BBLs. BBL debt might be a red flag.

It might create a lot of zombie companies though as someone now has to pay for dissolution.

 

[zeus70]

As of early 2026, the 6-year term for many Bounce Back Loans (BBL) taken out in May 2020 has expired. There is no "unblocking system" at Companies House that automatically clears restrictions just because 6 years have passed. Instead, the government has introduced a voluntary repayment window operating until 31 December 2025 to manage an enforcement backlog.

Key Developments After 6 Years (2026)

• No Automatic Amnesty: The 6-year mark does not erase debt or liability. If the loan is not repaid, the company may be investigated, even if it has already been dissolved.
• Voluntary Repayment Scheme (Deadline 31 Dec 2025): The government has set this deadline for directors to repay misused funds, partial payments, or full payments. While not a "true amnesty," coming forward early can act as a mitigating factor in investigations, potentially reducing disqualification periods.
• Enhanced Enforcement Powers: Under the Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021, the Insolvency Service can investigate directors of dissolved companies, with many director disqualifications (up to 15 years) still being processed in 2026 for pandemic-era misuse.
• Objections to Dissolution: Companies House continues to block the dissolution (strike-off) of companies with active BBL debt. Attempts to strike off are viewed as a red flag for fraud.

Exactly, there is already a process in place to tackle the bad debt\ fraud.

If you havent been chased by the banks for the last 6 years, its only 12 more month before it becomes statute barred. At this point, its best just to wait it out as banks have already stated they suspect 11% is fraud, so majority of it was genuine and therefore will be claimed from the government.

Regarding blocking dissolution, for those in the know, there is already conversations going on how to tackle this, bu various governemtn bidies again just wait it out.

 

[UK Contractor Accountant]

Regarding blocking dissolution, for those in the know, there is already conversations going on how to tackle this

Mr Bounce Back has the answers from the Government!

Breaking News: HM Treasury Have Finally Got in Touch and Have Confirmed to Me the Bounce Back Loan Write-Off Strategy and LTD Company Strike-Off Unblocking Mechanism I Proposed is on its Way​

 

[gpietersz]

Mr Bounce Back has the answers from the Government!

Breaking News: HM Treasury Have Finally Got in Touch and Have Confirmed to Me the Bounce Back Loan Write-Off Strategy and LTD Company Strike-Off Unblocking Mechanism I Proposed is on its Way​

Interesting site but requires a subscription.

The cases they list are of people who blatantly abused the scheme. Almost all of them either lied about turnover, or about whether the company was still trading. In the circumstances a few years of being disqualified as a director is getting off lightly.

There is one case there that is just a simple misuse of funds there. 50k legit loan, 46k transferred to a directors account the day after it was received!

Going back to Spongebob, where does this leave people making a reasonable/fair use of Spongebob - i.e. a small business that does not have enough assets to pay for proper liquidation?

 

[JEREMY HAWKE]

Going back to Spongebob, where does this leave people making a reasonable/fair use of Spongebob - i.e. a small business that does not have enough assets to pay for proper liquidation?

I will repeat what I have said on previous threads
A BBL at this moment in time might cause you problems if you scuppered the firm using The Spongebob plan

Only do this if you have no personal assets as you might be liable

 

[gpietersz]

@JEREMY HAWKE to clarify, I was thinking more of something I said in an earlier comment that the legal changes make Spongebob a riskier option even without a BBL. It looks like the intent is to ensure people either pay off creditors or go through proper liquidation. They are looking at blocking mechanisms for BBLs, but once you do that it would be very easy to simply bank strike offs if insolvent/wihtou paying creditors in general. If you have a BBL a strike off is not an option anyway, right?

Only do this if you have no personal assets as you might be liable

From what I read on MrBounceback they are using a mix of disqualification and criminal charges. I did not see any mention of going after personal assets of directors. Someone facing jail has bigger problems than them going after personal assets!

Judging by MrBounceback it looks like so far they are mostly going for disqualifications rather than criminal charges: 500 pages of "disqualification files" vs 20 of "BBL Jailbirds". That is despite most of the "disqualification files" involving false declarations and similar criminal conduct.